ECB Inaction Means U.S. Now More Important for Investors in Europe

The European Central Bank has wrong-footed markets that have been gunning for a response to the euro zone's low inflation problem. With rates on hold at 0.25% and the ECB unlikely to provide monetary fireworks, trades that bet on looser euro-zone policy are going out of style. Bets on a weaker euro may be among the biggest casualties.

The euro hit its highest level against the U.S. dollar since October 2011 on Friday, trading above $1.39, and further gains could be in store. Previously, bets against the euro had been...